Generating weekly certified payroll reports when you issue bi-weekly paychecks to your employees can be difficult unless your accounting software will accurately accrue the wages for each week – QuickBooks doesn’t have this ability and quite often this causes problems.
Payroll is one of the largest expenses that a company will have. Most companies, when they start up, will find out what the minimum requirements for paycheck frequencies are for the state that their business resides in – earlier this week we discussed paycheck/payroll frequencies by state – and they will follow those rules. This will work fine unless you are a contractor who makes the move to Public Works/Government Construction projects and become subject to prevailing wage laws. This is when problems can occur.
Under the Federal Davis-Bacon and related Acts; contractors and subcontractors performing work on Federal or Federally-aided construction-type contracts are required to submit weekly payrolls. The Copeland Act provides further/clearer requirements; indicating that contractors and subcontractors performing work on Federally financed or assisted construction contracts “furnish weekly a statement with respect to the wages paid to each employee during the preceding week”.
Obviously, contractors and subcontractors who issue their payroll on a weekly basis find the necessary information easier to obtain; therefore, making compliance of certified payroll reporting easier on the people who actually have to complete the reports.
What happens when your company is subject to the rules found in the Davis-Bacon and the Copeland Act and you issue your payroll on a bi-weekly basis?
I’m not here to tell you that you HAVE to start issuing your paychecks on a weekly basis – I’m only here to tell you what the requirements are and about what COULD happen – based on my experience; so that you can make an informed decision.
If you are lucky enough to have an accounting program that accurately accrues and distributes payroll taxes and wages based on when it is earned rather than when it is paid – you shouldn’t run into any issues when you create the certified payroll reports. BUT, if you use QuickBooks you need to be aware that it does not have this ability and your payroll is recognized only when you actually issue the paycheck and this is where the problem with your certified payroll reports COULD begin.
Each certified payroll report has a weekly calendar section {shown below} where by day and date you enter the number of hours that each employee worked on the prevailing wage job site and the total hours that he/she spend there during the entire week.
Right click on the image to enlarge it
When you issue payroll in QuickBooks on a bi-weekly basis – you will enter the time worked for each of the two separate workweeks in two individual timesheets, for example, let’s say that your pay period ends on a Saturday:
- Your first work week covers Sunday, December 21, 2003 through Saturday, December 27, 2003
- Your second work week covers Sunday December 28, 2003 through Saturday, January 3, 2004
- Your paychecks will be dated on January 7, 2004
Below are the two timesheet entries from QuickBooks:
- Workweek 1 has 24 hours on the Prevailing Wage Job and 16 hours on a non-prevailing wage job
Timesheet Work Week 1 - Right click to enlarge
- Workweek 2 has 24 hours on the Prevailing Wage Job and 16 hours on a non-prevailing wage job.
Timesheet Work Week 2 - Right click to enlarge
Next, we’ll look at the QuickBooks paycheck detail, you’ll see that the total number of hours are accurate for the full two weeks.
- A total of 48 hour at $28.50 per hour for $1,368.00 in wages for the prevailing wage job
- A total of 32 hours at $28.50 per hour for $916.00 in wages for the non-prevailing wage job
- Total gross for the 2 week period of $2,280.00
- Net wages for the week $1,528.33
Bi-weekly paycheck - right click to enlarge
When you create or run your certified payroll reports {whether is is with our Certified Payroll Solution software or using the built-in QuickBooks certified payroll report} you’ll need to generate two individual reports; one for each week. This is what the reports will look like:
- Week 1 – the hours are correct {24} and the rate of pay is correct {$28.50} BUT the gross amount earned This Job/All Jobs represents the FULL amounts from the bi-weekly paycheck {$1,368.00/$2,280.00} instead of $684.00 this job/ $1,140.00 All Jobs which was actually earned for this specific workweek.
Certified Payroll Report Week 1 - Right click to enlarge
- Week 2 – again, the hours are correct {24} and the rate of pay is correct {$28.50} BUT the gross amount earned This Job/All Jobs represents the FULL amounts from the bi-weekly paycheck {$1,368.00/$2,280.00} instead of $684.00 this job/ $1,140.00 All Jobs which was actually earned for this specific workweek.
Certified Payroll Report Week 2 - Right click to enlarge
Is this wrong? Well, sort of; the laws do indicate that payroll should be reported {therefore, issued} for the preceding week.
What can you do if you issue payroll on a bi-weekly basis?
Many of our own customers issue payroll on a bi-weekly basis, and on the Statement of Compliance {in the Remarks section} they add a note that indicates that they issue paychecks on a bi-weekly basis and while the certified payroll report accurately reflects the correct number of hours worked on the job for the specified week; gross amounts earned This Job/All Jobs, deductions {including taxes and other withholdings} and Net Pay reflect the full amounts from the single bi-weekly paycheck.
Will this statement keep you out of trouble?
Not necessarily, it all depends on the Contract Administrator and Awarding Agency.
The best thing to do, in my opinion, is to just bite the bullet and issue your payroll on a weekly basis; at least for the employees who work on the prevailing wage projects. This may mean some additional planing and scheduling on your part, but it’s easier than having your certified payroll reports rejected and having to manually calculate the gross, taxes, deductions and net pay and resubmit the reports!
Look for similar articles next week on how a semi-monthly or monthly payroll run will affect your certified payroll reports.
I hope that you’ve found this article to be informative and helpful in making informed decisions for your business; if so please take a moment to leave a comment or to share this with others on your favorite social networking platform using the buttons below.
The QuickBooks Weekly Timesheet can cause a lot of confusion for users who are implementing employee time tracking for the first time, mainly because the timesheet contains both a Service Item and a Payroll Item. This article will explain what each column is used for and some common pitfalls that can happen.
Job costing and employee time tracking are important aspects of many businesses – not just construction businesses. However, when you initially set up timetracking there are many things that can cause confusion.
About Service Items:
The Service Item column represents the type of work that is being performed and allows you to select/enter/choose the name of the service item/cost code from your Item List that you want to use when your charge/bill your customer for this work – OR – when you pay a subcontractor/non-employee for this item.
Even if you do not intend to charge anyone for this work, entering a service item provides a record of the amount of time spent on this specific type of work. This information will then flow through the the various “Time by” reports as well as your job costing reports..
When a Service Item is brought into an Invoice, it tells QuickBooks which accounts to use to track the income you receive and what Cost of Goods Sold/Expense account to use to track the money your company has spent – so it’s important that your items are set up to capture both Income and Expenses. This provides you with the ability to analyze which types of work/services are the most profitable and how much company time is spent on producing them.
About Payroll Items:
Payroll Item column allow you to select a Payroll Item {that also exists in the employee record} which determines how much the employee should be paid for doing the work that you selected in the Service Item column. This information will then flow through into employee paychecks and perhaps any invoices that you create that are based on billable time and costs.
What if the Payroll Item Column isn’t displayed?
When the Payroll Item column doesn’t appear in the Weekly Timesheet, for one or all employees, it usually means that the employee’s haven’t been setup to utilize timetracking, and you’ll need to check the setup in the employee record to be sure that the “Use time data to create paychecks” option has been checked and that Time tracking has been turned on in the Preferences.
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QuickBooks 2012 will include batch timesheet creation as an enhancement to the current “Use Weekly Timesheet” feature, allowing you the option to select multiple employee or vendor names for time entry. From the information that I’ve seen, Intuit is marketing this feature to contractors as a timesaver, and it may be for some businesses, BUT THERE IS A CATCH……
Each group of employees or vendors that you select MUST work on the same Job, under the same Service Item AND the same Payroll Item MUST be used during timesheet creation – additionally, they must ALL work the same number of hours each day!
See the Batch Timesheet function in action on our YouTube video
In order to successfully use the Batch Timesheet feature in QuickBooks Pro/Premier 2012 and Enterprise 12.0:
1. You MUST enable timetracking
- Logged into QuickBooks as the QuickBooks Administrator in Single-User Mode
- From the Edit menu -> choose Preferences -> scroll to Time & Expenses {the last preference} -> click on the Company Preferences tab
- Under the Time Tracking – Do you track time option -> select Yes and set the FIRST day of your work week
Right click on the image to enlarge it
- Click OK to save your changes
2. The Use time data to create paychecks option MUST be enabled for each employee
- From the Employee menu -> choose Employee Center -> click on the Employees tab -> double-click on an employee name OR click the Edit Employee button
- From the Change tabs drop down menu -> choose Payroll & Compensation Info
- Make sure the Use time data to create paychecks option is checked.
Right click on the image to enlarge it
- Click the OK button to save the changes for this employee
- Repeat for each employee in your employee list
3. You MUST use the Weekly Timesheet function
- From the Employee menu -> choose Enter Time -> Use Weekly Timesheet OR from the Home Page -> click the Enter time icon -> Use Weekly Timesheet
- In the Name field, click the drop down list and select either Multiple Names (Payroll) OR Multiple Names (Non-Payroll)
Right click on the image to enlarge it
- In the pop-up window, select multiple names, by placing a checkmark next to the name, and click ok to finalize your selections
 Select multiple employees |
 Select vendors |
- Enter timesheet information, selecting the Job, Service Item and Payroll Item
- Click on the Save and Close button to enter the information
Be aware of a potential problem:
A potential problem that I see with this feature, is let’s say that there are 4 employees {or vendors} who worked on a Job Monday through Thursday; on Friday, only 3 of these employees {vendors} were there. When you enter multiple timesheets, I forsee most people selecting all 4 employees/vendors and automatically entering ALL of the the time for the entire week. Using the batch timesheet option, you would need to be very careful when entering hours in this type of situation – as it could result in an employee or vendor being paid for erroneous hours worked and no one catching it. On the flip side, for employees who worked overtime, additional entries would be required on their individual timesheets to record overtime hours – if not this would result in underpayment.
NOTE: If you really need this type of functionality, investigate our Crew/Overtime Entry Solution program, which allows you to enter “exceptions” {the 4th employee not working on Friday} prior to posting the time data to QuickBooks.
This QuickBooks payroll tip discusses how to create various reports for hours worked before creating paychecks – to ensure that your employees are being paid correctly and that your job costing will be accurate.
An important part of running any business involves keeping track of how many hours your employees work on a specific job and/or task and then accurately paying your employees for those hours. This is especially true for accurate job costing – no matter what type of business you run.
The amount of time spent on record keeping for payroll can be overwhelming for anyone and usually involves multiple people.
This is especially true if you are still using mostly manual methods; for example back when I used to do the payroll for a contractor who had 125 employees working on 5 different jobs – we had a job time sheet for each job every week. The foreman on each job would turn in a handwritten report each week that listed who worked on the job, what their classification was, how many hours they worked each day, etc. Sometimes the employees worked under more than one work classification or task (each involving a different rate of pay) and other times a small group of employees would end up working on all 5 different jobs we had going on during a single workweek – and I would have to take those 5 job time sheets and enter them into QuickBooks in order to run payroll. Not a fun job and highly error prone – especially if I had an issue reading someone’s handwriting!
It’s important to run reports to verify the accuracy of the data entered into the QuickBooks Weekly Timesheet before cutting payroll!
Reports for hours worked to run in QuickBooks before creating paychecks
QuickBooks offers several reports that you can generate and use to verify that employee hours have been entered correctly.
- From the Reports menu
- Choose Jobs, Time & Mileage
- Here you’ll find several “Time by” reports, I like the Time by Job Detail Report
- Set the dates to be the workweek and employee hours by job will be displayed
This by itself is a very useful report, but it only displays the hours and the service item (cost code) that the hours were posted against. My payroll item list was always pretty specific (I named my payroll items by the work classification that the employees worked under) and I wanted to include that information in the Time by Job Detail Report – if your payroll item list is pretty specific; you too can include that information.
- Once the standard Time by Job Detail Report is displayed
- Click the Modify button at the upper right
- In the Display box, place a checkmark next to Payroll Item and click Ok
Once you have this overall report, the possibilities are endless. For example, you can go back into the Modify option and Filter it for a specific job, print it out and give it back to the foreman along with his original timesheet for the job for his approval – get him to sign off on the report.
If you memorize these reports it will make it so much easier for you each week.
We hope you found this tip to be helpful, if so please feel free to share it, or leave a comment.
This QuickBooks payroll tip discusses how to correct payroll hours incorrectly charged to a job after paychecks have been created and cashed.
Accurately job costing payroll hours and wages is critical for many business types, not just contractors. The information that is entered in QuickBooks Weekly Timesheets and paychecks is only as good as the information that is received from those who are responsible for providing the payroll clerk with the original employee hours spend on various jobs. However, we are all human and, therefore, make mistakes, some mistakes can be corrected more easily than others.
A common mistake that can occur is the reporting of employee payroll hours on one job – - when those hours really should have been reported on another job; for example it was originally reported that employee John Doe worked 20 hours on Job A – in reality those 20 hours were spent on Job B. Quite often this error is reported to the payroll clerk after paychecks have already been processed and the checks have been cashed.
Quite often this situation puts the payroll clerk in a quandary about how to correct payroll hours incorrectly charged to a job.
When the error just involves changing a job {moving the hours from Job A to Job B} and does not involve also having to change a rate of pay; the easiest way to correct payroll hours incorrectly charged to a job is to edit both the timesheet and paycheck detail for the employee and change the job there.
When you edit both the timesheet and the paycheck detail, change the job, and then save your changes, QuickBooks will throw out some warning messages – don’t worry, for once it is ok to ignore these messages. Usually it’s not a good idea to ignore warning messages.
Another situation in which this type of correction can occur is when payroll is being processed, using time data entered in the Weekly Timesheet, and the payroll clerk is verifying the hours entered in QuickBooks against the timecards from the field, she discovers that the timesheet referenced Job A and it should have been Job B. The initial reaction is to just go ahead and make the change in the paycheck detail and call it good. However, what many people do not realize is that when you make a change in the paycheck, while processing payroll, the original timesheet entry is not updated to reflect this updated information – you must also go back and correct the job assignment in the timesheet.
Recap: If it’s just a change in job and not a change in hourly rate/wages; edit both the timesheet and the paycheck detail and make the change. That is the easiest thing to do to correct payroll hours incorrectly charged to a job when it doesn’t have an impact on wages.
